The Business Deals That Could Imperil Trump

Mr. Fritsch and Mr. Simpson are the founders of the research firm Fusion GPS.

April 21, 2018

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A Russian émigré with a checkered past helped develop what was known as Trump SoHo until last December.CreditCreditTodd Heisler/The New York Times

Put aside Russian collusion for a moment. Press pause on possible presidential obstruction of justice. Forget Stormy Daniels. The most significant recent development involving the president may be that the special counsel, Robert Mueller, has subpoenaed Trump Organization business records as part of his inquiry into Russian interference in the presidential election.

Those documents — and records recently seized by the F.B.I. from the president’s personal lawyer Michael Cohen — might answer a question raised by the president’s critics: Have certain real estate investors used Trump-branded properties to launder the proceeds of criminal activity around the world?

We pored over Donald Trump’s business records for well over a year, at least those records you can get without a badge or a subpoena. We also hired a former British intelligence official, Christopher Steele, to look into Mr. Trump’s possible ties to Russia. In that 2015-2016 investigation, sponsored first by a Republican client and then by Democrats, we found strong indications that companies affiliated with Mr. Trump, then a presidential candidate, might have been entangled in foreign corruption.

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Donald Trump, Tevfik Arif, center, and Felix Sater at the 2007 launch party for Trump SoHo, which they developed together.CreditMark Von Holden/WireImage, via Getty Images

A string of bankruptcies in the 1990s and 2000s may have left Mr. Trump’s companies largely unable to tap traditional sources of financing. That could have forced him to look elsewhere for financing and partners at a time when money was pouring out of the former Soviet Union.

Indeed, from New York to Florida, Panama to Azerbaijan, we found that Trump projects have relied heavily on foreign cash — including from wealthy individuals from Russia and elsewhere with questionable, and even criminal, backgrounds. We saw money traveling through offshore shell companies, entities often used to obscure ownership. Many news organizations have since dug deeply into the Trump Organization’s projects and come away with similar findings.

This reporting has not uncovered conclusive evidence that the Trump Organization or its principals knowingly abetted criminal activity. And it’s not reasonable to expect the company to keep track of every condo buyer in a Trump-branded building. But Mr. Trump’s company routinely teamed up with individuals whose backgrounds should have raised red flags.

Consider the Bayrock Group, a developer that once had lavish offices in Trump Tower. The firm worked with Mr. Trump in the mid-2000s to build the Trump SoHo in Lower Manhattan, among other troubled projects. One of its principals was a Russian émigré, Felix Sater, linked to organized crime who served time for felony assault and who later pleaded guilty to racketeering involving a $40 million stock fraud scheme.

Belgian authorities accused a Kazakh financier recruited by Bayrock of carrying out a $55 million money-laundering scheme (that case was settled without an admission of guilt). Civil suits filed in Los Angeles and New York allege that a former mayor of the largest city in Kazakhstan and several of his family members laundered millions in stolen public funds, investing some of it in real estate, including units in Trump SoHo. (The family has denied wrongdoing and says it is the victim of political persecution.)

Then there is Sunny Isles Beach, where over 60 individuals with Russian passports or addresses bought nearly $100 million worth of units in Trump-branded condominium towers in a part of South Florida known as Little Moscow. Among them were Russian government officials who made million-dollar investments and a Ukrainian owner of two units who pleaded guilty to one count of receipt of stolen property in a money-laundering scheme involving a former Ukrainian prime minister.

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Alexandre Ventura Nogueira handled much of the sale of condominiums at the Trump Ocean Club International Hotel and Tower in Panama. He said he sold about half of his Trump condos to Russians, including some connected to the Russian mafia.CreditStephen Grey/Reuters

In 2006, the sale of condos in the first international hotel venture under the Trump brand, the former Trump Ocean Club International Hotel and Tower in Panama, fell, in large part, to a Brazilian named Alexandre Ventura Nogueira. He worked with a Colombian who was later convicted of money laundering. Mr. Nogueira told NBC News last year that he sold about half of his Trump condos to Russians, including some connected to the Russian mafia, and that some of his clients had “questionable backgrounds.”

Three years later, as Reuters has reported, Panamanian authorities arrested Mr. Nogueira on charges of fraud and forgery unrelated to the Trump project. After getting out on bail, he fled to Brazil, where he faces a separate money-laundering investigation. In 2014, he fled Brazil, too.

The Trumps typically claim to be passive partners in projects like Trump Ocean Club and that they had minimal dealings with the likes of Mr. Nogueira. (The chief legal officer for the Trump Organization, Alan Garten, has said that no one in the Trump family remembers meeting or speaking to Mr. Nogueira. But there are photos of Mr. Trump and his daughter Ivanka with Mr. Nogueira.) Yet Mr. Trump’s limited public disclosures reveal his company has earned millions from licensing fees, a percentage of property sales and management fees in foreign projects. And the Trump family was sometimes personally involved in everything from a project’s design to its décor.

That appears to have been the case with the Trump International Hotel & Tower in Baku, the capital of Azerbaijan, a high-end residence and hotel that has yet to open. In 2012, the Trumps signed a licensing agreement with the local developer, Anar Mammadov — the son of the country’s billionaire transportation minister, Ziya Mammadov, who an American diplomat once described in cables published by WikiLeaks as “notoriously corrupt even for Azerbaijan.”

The Trump Organization has said that it conducted an extensive due-diligence review of Anar Mammadov and that questions about the source of his wealth surfaced after they signed the deal. Presumably, Mr. Mueller will want to see evidence of that.

In Vancouver, the Trump Organization partnered with the son of Tony Tiah Thee Kian, a Malaysian oligarch who was convicted of providing a false report to the Kuala Lumpur stock exchange. That project, which was guided by Ivanka Trump and is one of the few Trump-branded properties to open since Mr. Trump took office, is now the subject of an F.B.I. counterintelligence inquiry, according to CNN. Mr. Garten, the Trump chief legal officer, told CNN: “The company’s role was and is limited to licensing its brand and managing the hotel. Accordingly, the company would have had no involvement in the financing of the project or the sale of units.”

It remains unclear whether Mr. Mueller will investigate these deals, or already is. But a comprehensive investigation could raise questions about the Trump Organization’s compliance with anti-money-laundering laws and the Foreign Corrupt Practices Act, which — according to the Securities and Exchange Commission and the Department of Justice — makes it a crime for a United States company to act with willful blindness toward the corrupt activities of a foreign business partner.

The former Donald Trump insider Steve Bannon has hinted darkly about the Trump family’s exposure to money laundering. And Mr. Mueller has already secured the indictment of Paul Manafort, Mr. Trump’s former campaign chairman, on charges of money laundering related to his work in Ukraine. Federal prosecutors are reported to be looking into Jared Kushner’s family firm over its use of a federal program that offered wealthy Chinese investors visas in return for investments. Kushner Companies has denied any wrongdoing.

The Trump family’s business entanglements are of more than historical significance. Americans need to be sure that major foreign policy decisions are made in the national interest — not because of foreign ties forged by the president’s business ventures.

Peter Fritsch and Glenn R. Simpson, former journalists, are the founders of the research firm Fusion GPS.